Airgas, Inc., through its subsidiaries, is the largest U.S. distributor of industrial, medical, and specialty gases, and hardgoods, such as welding equipment and supplies. Airgas is also the third-largest U.S. distributor of safety products, the largest U.S. producer of nitrous oxide and dry ice, the largest liquid carbon dioxide producer in the Southeast, and a leading distributor of process chemicals, refrigerants, and ammonia products. More than eleven thousand employees work in about nine hundred locations including branches, retail stores, gas fill plants, specialty gas labs, production facilities and distribution centers. Airgas also distributes its products and services through eBusiness, catalog and telesales channels. Its national scale and strong local presence offer a competitive edge to its diversified customer base.
259 North Radnor-Chester Road Suite 100 Radnor, PA 19087-5283, USA Phone: 610-687-5253 Fax: 610-687-1052 Web: www.airgas.com Email: investors@airgas.com
Industry:CHEM-DIVERSIFD Sector: Basic Materials Fiscal Year End:March Last Reported Quarter:06/30/10 Next EPS Date:10/28/10
Capital Structure Solvency and Cash Flow
For the first nine months of FY10, capital expenditures declined to 6.7% of sales from 8.4% in the prior year quarter. For the first nine months of FY10, free cash flow was $289 million versus $171 million in the prior year period, driven by adjusted cash from operations of $470 million, up from $436 million in the prior year period, and by a 32% reduction in capital expenditures to $192 million for the first nine months of FY10. Capital expenditure was $60.3 million in 3Q10.
Return on capital was 10.1% in 3Q10 versus 13.5% in 3Q09, driven by the decline in operating income reflecting the difficult economic environment over the past year.
In the first nine months of FY10, ARG reduced adjusted debt by $191 million, and acquired five companies including two relatively large transactions (Tri-Tech and Fitch Industrial) with annual revenue of $47 million. Management expects cash flow to remain strong and markets to continue gaining momentum in the coming quarters. ARG strengthening sales and marketing organization, expanding product lines, and streamlining supply chain are the growth factors. Airgas becomes more customer-focused every day, and ready to capitalize on an improving economy. The company expects cash flow to remain strong and markets to continue gaining momentum.
Airgas hiked its quarterly cash dividend by 22% from $0.18 per share to $0.22.
Last edited Thu Mar 11, 2010 01:08 AM by MadhubantiMaitra (Zacks Investment Research)
Governance Social Responsibility and Employee Relations
Proposed acquisition of Airgas by Air Products & Chemicals Inc. (APD)
On February 5, 2010, ARG was offered to be acquired by for $60.00 per share in cash. The total value of the transaction is approximately $7.0 billion, including $5.1 billion of equity and $1.9 billion of assumed debt. The acquisition is expected to be immediately accretive to Air Products' earnings per share on both a GAAP and cash basis, excluding expected one-time costs.
Air Products' offer fully values Airgas' complementary capabilities and attractive long-term prospects. Headquartered in Pennsylvania, the combined company would be the largest industrial gas company in North America and one of the largest in the world, with distinctive strengths across all geographies and in all three distribution channels: packaged gases, liquid bulk and tonnage. A combination of the two companies would be financially and strategically compelling, with substantial cost synergies of $250 million by the end of year two, and the ability to accelerate growth both domestically and internationally by leveraging Airgas' extensive U.S. sales force and packaged gases skills on the foundation of Air Products' global presence and infrastructure.
Last edited Thu Mar 11, 2010 01:09 AM by MadhubantiMaitra (Zacks Investment Research)
